Friday marked the failure of another bank, pushing the 2010 total to 42. The Federal Deposit Insurance Corporation took over Beach First National Bank in Myrtle Beach, South Carolina.

The bank had $585.1 million in assets and $516 in deposits. Bank of North Carolina, based in Thomasville, is taking over the failed bank's assets and deposits. The Beach First failure is expected to cost the FDIC $130.3 million.

A growing number of loan defaults, especially in the commercial real estate sector, have put considerable pressure on banks across the country. In fact, failures are expected to peak this year, exceeding the 140 that occurred in 2009, which was the worst year since 1992.

Another seven banks were shuttered last week, bringing the number of bank failures in 2010 to 37. The most recent casualties came from Alabama, Georgia, and Minnesota on Friday alone. Earlier in the week, banks in Utah and Ohio were added to the count.

Advanta Bank, in Draper Utah, wasn't able to attract a buyer. The FDIC stepped in and approved payouts for insured deposits, with checks to depositors expected to be mailed on Monday. Advanta had $1.6 million in assets and $1.5 million in deposits.

Four more banks bit the dust last week, bringing the total to 30 -- just shy of 75 days into 2010. Regulators closed banks in New York, Florida and Louisiana, representing in aggregate nearly $1.1 billion in assets and a little over a billion dollars in deposits.

Park Avenue Bank in New York was shut down by the FDIC this week. It had $520.1 million in assets and $494.5 million in deposits as of the end of last year. Its deposits will be assumed by Valley National Bank, which is based in Wayne, New Jersey, and it will pay a small premium for them. Valley National also agreed to pick up virtually all of the bank's assets.

Three more banks failed last week, bringing 2010's total to 25. Already, this year's bank failures have matched the 2008 full-year total and exceeded the 2007 amount by a factor of greater than eight. The three regional banks that failed last week were in Florida, Illinois and Maryland, with close to a billion dollars in aggregate assets. According to the FDIC, the pace of bank failures could be set to accelerate in the next few months.

Sun American Bank, in Boca Raton, was taken over by the FDIC, with First-Citizens Bank & Trust, based in Raleigh, N.C., assuming the Florida banks assets and almost all of its deposits. Sun American had assets of $535.7 million and $443.5 million in deposits. Since July, First-Citizens has acquired the assets of four failed banks, the others being First Regional Bank of Los Angeles, Venture Ban (Lacey, Wash.) and Temecula Valley Bank (Temecula, Calif.).

So, I was flipping through some articles in Rolling Stone, when I found a very interesting economic story - yes, in Rolling Stone. The article, "Wall Street's Naked Swindle," takes a look at what happened in the options pits leading up to the death of Bear Stearns and Lehman Brothers. According to the article, an unknown option buyer made "one of the craziest bets Wall Street has ever seen," by shorting Bear Stearns. The unknown trader felt that Bear Stearns would lose "more than half" of its value in nine days or less, a bet that one financial analyst likened to buying 1.7 million lottery tickets.

What is crazy is that this bet paid off, leading to only one conclusion: insider trading (cue dramatic music). When Bear Stearns dropped from roughly $63 to $2 per share on March 17th (just six days later), the person purchasing the options made roughly $270 million. Senator Chris Dodd from the Senate Banking Committee thought that something wasn't on the up and up with this trade, and the Securities and Exchange Commission (SEC) promised it would look into the trade. Of course, nothing has happened since.

What a way to go into the holiday weekend, eh? On Thursday, seven banks were shut down by authorities, which pushed the total of failed banks for 2009 to 52 -- which more than doubles the number of bank failures in 2008. Six of the seven banks seized were located in Illinois and the other was in Texas, according to the Federal Deposit Insurance Corporation (FDIC).

According to the federal group, the Illinois failures are interlinked, as all six banks were controlled by one family and used a similar business model. The FDIC noted that this model "created concentrated exposure in each institution." This model left the banks heavily exposed to collateralized debt obligations and other loan losses. The six banks brings the total of failed banks in Illinois to 12.

As for the Texas bank failure, it was the first in the state this year.

The New York Times reports that the Federal Deposit Insurance Corporation (FDIC) is hiring back experienced people as the number of failed banks rises. Its report gives a good idea of what the FDIC does to rescue a failed bank. In a nutshell, when a bank fails the FDIC tries to find a stronger partner who can take over the foundering operations. Starting on Friday evening, the FDIC does triage so that it knows which assets and deposits the partner will get and which will go on the FDIC's books.

Here are six key steps:

• Find a merger partner. For example, the Times reports that on Friday May 9, the FDIC seized Arkansas National Bank (ANB) -- a $2.1 billion construction lender -- and arranged for it to be acquired by Pulaski Bank and Trust Company. As it usually does, the FDIC planned to use the weekend to minimize the disruption to depositors of ANB.
• Enter town quietly. FDIC personnel try not to alert the locals to their presence. The Times reports that they "used personal credit cards, rather than cards provided by the FDIC, to avoid detection." And they were told to give a false reason for their presence in town. The Times quotes Gary Holloway, a hired back retiree, who said: "If anybody asked why they were in town, they were told to say that they were with the Toy Shop on business."